President Joe Biden’s selling oil, again.
With elections just around the corner, the White House plans to place an additional 10 million to 15 million barrels of black gold on the market from the nation’s Strategic Petroleum Reserve to try to blunt rising fuel prices, writes POLITICO’s Ben Lefebvre.
This is not a novel plan. The new release would represent the final batch of a historic 180-million-barrel crude sell-off that Biden announced in March. Now as then, the White House is trying to thwart the kind of escalating pump prices that can cripple presidential agendas.
Republicans are already using energy prices as a cudgel against Biden’s leadership. But oil experts say releases from the reserve can’t touch the fundamental worldwide imbalance of supply and demand pushing up prices for transportation, electricity and home heating.
“It's a short-term Band-Aid, and it doesn't solve the long-term problem,” said Phil Flynn, an energy market analyst with the PRICE Futures Group.
But with the Russian war against Ukraine and post-pandemic economic upheaval still rocking the global market — not to mention the OPEC+ cartel’s steep cuts in crude output — Biden is under pressure to show he’s got a handle on prices.
How did it come to this?
Experts say there’s little a U.S. president can do when crude prices rise, a truism that’s haunted the Biden White House.
Strategies such as drawing from the strategic reserve have bumped shoulders with politically unpalatable ideas like easing sanctions on Venezuela and Iran. Republicans, meanwhile, most often call for increasing U.S. production — but it’s not that simple.
The U.S. oil and gas industry operates mostly in a free market, meaning when Exxon Mobil Corp. wants to drill, it drills. The most the administration can do is process drilling permits — something Biden’s agencies are already doing.
And then there’s climate change. Boosting oil ultimately means more of the carbon emissions driving an escalating climate crisis. It’s also at odds with Biden’s goals to halve the nation’s emissions by 2030.
So should the administration continue to draw from the reserve?
No, according to Flynn with PRICE Futures. That would only give OPEC greater leverage to respond by cutting production in member countries to keep prices high.
“OPEC can play that game all year long, while we’re starting to run out of oil,” Flynn said.
With impossible scenarios weighing on White House advisers, the Department of Energy has considered temporarily limiting the amount of U.S. gasoline and diesel that is exported every day, while others have pressed for an all-out crude export ban.
But keeping supply at home has its own political, and human, consequences, restricting supplies that U.S. allies need as the global energy crunch enters its next chapter: winter.